Food stamp fraud scheme bilked $2.8M from government, authorities say

December 16, 2013|By Brittany Shammas, Sun Sentinel

The owners of a now-defunct mom-and-pop grocery store in Palm Beach County ran a four-year scheme where they are accused of ripping off millions of dollars from the government by allowing food stamps recipients to withdraw cash using their benefits cards.

During the time the scheme was running at the small store, investigators say Hadi and Ali Jaber processed about as many food stamp transactions as an average Publix. They bilked an estimated $2.8 million from a program aimed at helping low-income families eat healthy. In return, the brothers, who owned Fajita's Meat and Fish in Palm Springs, charged food stamps card holders a premium of 30 to 50 percent, which the business pocketed.

Their practice came the under scrutiny of investigators in spring 2012, when a woman complained to the Sheriff's Office that her granddaughter's father was using his benefits card — commonly called an EBT card — to get cash instead of buying groceries for the child. It sparked an investigation by the local and federal agencies dubbed "Operation Money Tree," which ultimately toppled the scam.

Hadi and Ali Jaber and store employee, Daniel Velazquez were arrested on Dec. 10 on federal charges, according to the criminal complaint filed against them in court. And on Monday, Sheriff's Office deputies fanned out around the county trying to track down and arrest at least 60 people who visited Fajita's Meat and Fish to take cash from their benefits cards. They will be charged with trafficking in food stamps, authorities said.

Sheriff Ric Bradshaw said for those involved in the scheme, the mentality is, "they're not stealing from individuals — they're stealing from the government — so it's OK." But the Sheriff's Office will aggressively pursue those who abuse the system, he said.

This is not the first time a food stamp fraud scheme has been caught and dismantled in South Florida. Employees at a Liberty City grocery store in Miami-Dade County called Gina's Supermarket handed out $4.2 million in cash from benefits cards, keeping half for themselves, during a three-year period before getting busted in 2007, the Miami Herald reported at the time.

The owners of Belle Glade supermarket Billy's Market were arrested in 2009 after an investigation revealed they defrauded the government of an estimated $300,000 over three years by allowing food stamps beneficiaries to withdraw cash from their cards and charging a fee.

According to investigators and the complaint, the Fajita's Meat and Fish scam worked like this: A food stamps recipient would bring his or her benefits card to the store, at 3921 10th Ave. North, and hand it to Velazquez or one of the Jabers and ask for $200 to $800 in cash. The clerk would swipe it and give the person cash the clerk kept in a wallet or pocket.

Additional cash — 30 to 50 percent on top of the amount the food stamps recipient requested — was registered as a transaction on the store's receipts. That money then went into Fajita's corporate bank accounts when the federal government paid the phony amount to the store.

The process played out during each of 20 "buys" conducted by undercover agents between March 2012 and June 2013, the complaint said. About 100 food stamps recipients who were visiting the store to withdraw cash were identified using video and photographic surveillance conducted during that time frame.

Sheriff's Capt. Eric Coleman said the volume of food stamps transactions the small grocery store was doing was comparable to the amount at an average Publix. Bank records show Fajita's Meat and Fish deposited a total of $6 million — some of which may be legitimate — from food stamps sales between 2009 and 2013, according to the complaint.

"Greed factors into this," Coleman said, "and they're taking the benefits away from those who need it the most."